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The price of innovation: new estimates of drug development costs.
The research and development costs of 68 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. These data were used to estimate the average pre-tax cost of new drug development. The costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval. The estimated average out-of-pocket cost per new drug is 403 million US dollars (2000 dollars). Capitalizing out-of-pocket costs to the point of marketing approval at a real discount rate of 11% yields a total pre-approval cost estimate of 802 million US dollars (2000 dollars). When compared to the results of an earlier study with a similar methodology, total capitalized costs were shown to have increased at an annual rate of 7.4% above general price inflation.
Duke Scholars
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Related Subject Headings
- United States
- Research Support as Topic
- Organizational Innovation
- Inflation, Economic
- Humans
- Health Policy & Services
- Drugs, Investigational
- Drug Industry
- Drug Evaluation, Preclinical
- Drug Evaluation
Citation
![Journal cover image](https://secure.syndetics.com/index.aspx?isbn=/lc.gif&issn=1879-1646&client=dukeuniv)
Published In
DOI
EISSN
ISSN
Publication Date
Volume
Issue
Start / End Page
Related Subject Headings
- United States
- Research Support as Topic
- Organizational Innovation
- Inflation, Economic
- Humans
- Health Policy & Services
- Drugs, Investigational
- Drug Industry
- Drug Evaluation, Preclinical
- Drug Evaluation